10-KPeriod: FY2010

FISERV INC Annual Report, Year Ended Dec 31, 2010

Filed February 24, 2011For Securities:FISV

Summary

Fiserv Inc.'s 2010 Form 10-K highlights a company with a robust business model providing essential financial technology solutions. The company generated $4.1 billion in revenue, with 83% stemming from recurring account and transaction-based fees, demonstrating a stable revenue stream. Despite economic challenges impacting the financial services industry, Fiserv managed to grow its revenue by 1% year-over-year, driven by its Payments and Financial Institution Services segments. Key financial strengths include $958 million in operating cash flow, showcasing operational efficiency. The company also actively manages its capital structure, with $3.4 billion in long-term debt, and repurchased approximately $413 million of its common stock in 2010, signaling confidence in its future prospects. The acquisition of AdviceAmerica, Inc. in the investment services segment further bolsters its offerings, indicating a strategic approach to growth and market position. Investors should note the company's focus on innovation, operational excellence, and disciplined capital allocation as core strategies for continued success.

Financial Highlights

53 data points
Beta

Revenue

$4.13B

87.1% Gross Margin

Net Income

$496.00M

12.0% Net Margin

EPS (Diluted)

$0.82

Total Assets

$8.28B

Cash & Equivalents

$563.00M

Free Cash Flow

$783.00M

Financial Statements
Beta
Revenue$4.13B
Cost of Revenue$533.00M
Gross Profit$3.60B
SG&A Expenses$740.00M
Operating Expenses$3.13B
Operating Income$1.01B
Interest Expense$198.00M
Net Income$496.00M
EPS (Basic)$0.82
EPS (Diluted)$0.82
Shares Outstanding (Basic)601.60M
Shares Outstanding (Diluted)606.80M

Key Highlights

  • 1Generated $4.1 billion in total revenue in 2010, with 83% from recurring processing and services revenue, indicating a stable business model.
  • 2Reported $958 million in net cash provided by operating activities from continuing operations, demonstrating strong cash generation.
  • 3Acquired AdviceAmerica, Inc. to enhance its wealth management and financial advisor software capabilities.
  • 4Actively managed its capital structure, issuing new senior notes and repurchasing existing debt, while also executing significant share repurchases totaling $413 million in 2010.
  • 5Maintained a diversified client base, with the largest client representing only 6% of annual revenue, mitigating concentration risk.
  • 6Continued investment in product development, representing approximately 9% of total revenue, to drive innovation and client value.

Frequently Asked Questions

Fiserv operates primarily through two segments: Payments and Financial Institution Services. The majority of its revenue (83% in 2010) is derived from recurring account and transaction-based fees for its technology solutions, with a smaller portion coming from product sales.

In 2010, Fiserv achieved $4.1 billion in revenue, a 1% increase over 2009, primarily driven by growth in its Payments segment. Net income from continuing operations was $506 million. The company also generated strong operating cash flow of $958 million, reflecting the resilience of its recurring revenue model.

Fiserv's strategy focuses on enhancing client relationships through integrated solutions, strategic acquisitions (like AdviceAmerica in 2010), innovation in product development, achieving operational excellence, and disciplined capital allocation. The company aims to be a global leader in transaction-based technology solutions.

Key risks include adverse impacts from U.S. and global economic conditions, consolidation and failures within the financial services industry (which can reduce client numbers), intense competition, the need to adapt to technological changes, potential difficulties in renewing client contracts, and regulatory changes such as the Dodd-Frank Act. Security breaches and operational failures are also significant concerns.